McDonald’s joins Gartner’s supply chain ‘masters’

McDonald’s has been promoted to the “masters” category in Gartner’s annual supply chain top 25.

The firm now joins Amazon, Apple and P&G in Gartner’s top category. The masters category was created in 2015 to recognise sustained leadership in supply chains, and sits above the top 25 list.

Stan Aronow, research vice president at Gartner, said: “The key to McDonald’s success is skilful orchestration across a network of strategic suppliers, service providers and thousands of companies and franchise-owned stores worldwide.

“The company is also experimenting with digital supply chain capabilities like augmented reality to manage storerooms, so staff can spend more time with the customer.”

Speaking to SMearlier this year, Connor McVeigh, McDonald’s UK supply chain director, said the firm had moved from day-to-day supply to building long-term relationships. “There’s a greater focus on partnership – open communication and engagement and long-term relations,” he said.

“Every conversation I have with a supplier about price is usually followed by a conversation about how we are going to invest for the future. With a stable and confident supply base, we can focus on the stuff that really excites me: how can we improve our proposition?”

In the top 25 list, consumer goods company Unilever held the top spot for the third year in a row, followed by Inditex, Cisco and Colgate-Palmolive. McDonald’s was ranked second in the top 25 last year.

New entrants to the list included Novo Nordisk and Adidas, both making their first appearances, while Home Depot rejoined the list after a three-year absence.

The top 25, now in its 14th year, ranks businesses’ supply chains based on a mixture of business performance and analysis of leadership and future potential.

Aronow said 2017 was a “healthy year for growth, despite heated trade rhetoric”.

He said risks in 2018 include growing trade protectionism particularly in the UK and US, which has led many firms to re-evaluate their location strategies for their supply networks, and strong business growth putting pressure on supply.

“The most advanced supply chains are proactively managing these risks and continue to post solid performances,” he said.

One of the key trends that made high performing supply chains stand out was the ability to deliver a good customer experience – including through interaction with a supplier’s employees or systems. High performers were also already scaling up their digital supply chain technologies, not only automation but the use of artificial intelligence and chatbots for customer service.

Leading companies were also moving towards circular supply chains, Aronow said, taking a lifecycle approach to measuring the cost and sustainability of a product. “Some companies are now recycling and repurposing old parts in new products and extending the lifecycle of existing equipment, as part of broader circular business strategies,” he said.